The Journal, June 2013
A major venture capital company in the region is about to celebrate its ninth birthday.
Newcastle-based Northstar Ventures has invested £75m in more than 400 small and medium sized businesses (SMEs) across the North East since it was set up in 2004. This has helped to create 1,600 jobs and every £1 Northstar has invested has attracted another £2 on top for SMEs.
The firm manages two funds on behalf of the Finance for Business North East programme which is overseen by North East Finance – the £25m Accelerator and £15m Proof of Concept Fund. These have invested in a variety of sectors, namely technology, cleantech, healthcare and engineering.
Between 2004 and 2009 Northstar invested the £30m North East Co Investment Fund and £13.5m North East Proof of Concept fund and in 2010 and 2011 the £2.4m North East Creative Content Fund. Returns from the investments made by these funds are generating legacy funds which will be re-invested to support more SMEs in the North East.
The North East has the highest number of technology start-ups in the UK outside of London and Northstar has 60% of its investments in this sector.
Director Alasdair Greig said: “Venture capital is really important to the economy in the North East – Northstar’s figures prove this. Northstar has invested £75m into 410 companies over the past nine years, and this has helped to create more than 1,600 jobs and safeguard almost 600.
“This has also generated £158m of co-investment from other investors. Without the local access to investment capital in the North East provided by organisations such as Northstar, the companies we have helped to become established or expand may have moved out of the region.”
Examples of companies Northstar has invested in include Cramlington-based Palringo, an instant messaging provider; iEvo, which produces a biometric finger reader; Kykloud, a leading provider of mobile surveying and asset management software; web analysts CANDDi; Middlesbrough company Amplience and Curar Animal Therapeutics.
North East LEP chief executive Edward Twiddy said: “For many years the North East has benefited from programmes to provide capital to small and medium-sized businesses. These have delivered long-term benefits to companies and individuals and will continue to do so as the returns from these funds are re-invested in SMEs in the region.
“Northstar have made a major contribution to this through their investments and the figures they have announced show the scale and the value of their contribution to the region in terms of investment and of the jobs created and safeguarded in the region.
“It is particularly important that the private sector investment expertise that Northstar and others have attracted to the region remains at the core of these programmes.”